The US budget deficit fell to 2.5% of GDP, the lowest level since 2007

Federal
Reserve Chair Yellen chats with Treasury Secretary Lew as they
attend a meeting of the FSOC at the Treasury Department in
WashingtonThomson
Reuters

WASHINGTON (Reuters) - The U.S. budget deficit narrowed to $439
billion in fiscal 2015, the lowest level since 2008, as the
economy continued to recover from the financial crisis and
revenue growth outpaced a rise in spending, the Treasury
Department said on Thursday.

The 2015 deficit fell to 2.5 percent of gross domestic product,
the lowest since 2007 and less than the average of the last 40
years. Last year's deficit was $483 billion, with a
deficit-to-GDP ratio of 2.8 percent. Accounting for calendar
adjustments, the 2015 fiscal year deficit was $445 billion.

The shrinking deficit is a marked change from the $1
trillion-plus annual deficits the U.S. government reported from
fiscal 2009-2012 when it ramped up spending to deal with the
effects of the financial crisis.

Congressional leaders and the White House have been holding
closed-door talks on reaching a two-year budget deal. They face a
Dec 11. deadline, when current funding for federal agencies
expire.

Republicans want the budget negotiations to eliminate strict
budget caps on defense programs, while Democrats want to kill the
caps for defense and other domestic programs.

Congress also faces an impending debt ceiling deadline. The
Treasury said earlier on Thursday that the U.S. government will
exhaust its borrowing capacity no later than Nov. 3, two days
earlier than its previous estimate.

Raising the debt limit is a controversial issue for conservative
Republicans. They want to extract deep reductions in domestic
spending over the long term before allowing an increase in
government borrowing.

For September, the Treasury recorded a budget surplus of $91
billion, down from a $106 billion surplus a year ago. Analysts
polled by Reuters had forecast a $95 billion surplus for last
month.

Receipts in September totaled $365 billion, up 4 percent from the
same month in 2014, while outlays were up 12 percent to$274
billion.

A Treasury official, who spoke on condition of anonymity, told
reporters that receipts last month were dampened by a difference
in the composition of business days.

The non-partisan Congressional Budget Office has forecast a $414
billion deficit for fiscal 2016, and continues to warn that
increasing federal debt levels are unsustainable over the long
term.